Crude oil prices moved higher today after the Energy Information Administration reported an inventory decline of 2.1 million barrels for the week to September 15.
That compared with a build of some 4 million barrels for the previous week.
Meanwhile, the American Petroleum Institute estimated crude oil stocks in the U.S. had fallen yet again, by 5.25 million barrels, in the week to September 15. That was twice the draw analysts had expected the API to report.
As oil prices took a pause from their recent rally amid a profit-taking wave, the EIA also reported inventory draws in fuels.
In gasoline, the EIA estimated an inventory decline of 800,000 barrels for the week to September 15, with production averaging 9.7 million barrels daily.
This compared with an inventory build of 5.6 million barrels for the previous week, when production stood at an average 9.2 million bpd.
In middle distillates, the EIA reported an inventory draw of 2.9 million barrels for the week to September 15, with production averaging 4.8 million barrels daily.
This compared with an inventory increase of 3.9 million barrels for the previous week, when middle distillate production averaged 5 million barrels daily.
Prices, meanwhile, remain elevated despite the recent dip. U.S. crude in particular has become so expensive demand for it from Asia and Europe is on the decline. This does not mean lower retail fuel prices for U.S. drivers, however.
Bloomberg pointed out in a report on price developments that “the price jump will inevitably filter through to higher gasoline and fuel costs in the US and beyond, threatening to quicken the pace of inflation everywhere,” even as more U.S. oil stayed at home.
Meanwhile, all eyes are once again on the Federal Reserve, which today concludes its latest two-day session of monetary policy discussions. The oil price jump could change its mind about interest rates, which the Fed had indicated it was about to abandon.
Yet as higher oil prices feed higher inflation, the Fed might return to hikes to arrest the upward price move.
By Irina Slav for Oilprice.com